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Embraer Deferred Prosecution Agreement

Brazilian aircraft manufacturer Embraer S.A. (Embraer) has reached a resolution to resolve criminal complaints and has agreed to pay a fine of more than $107 million for plans to bribe officials in the Dominican Republic, Saudi Arabia and Mozambique, and to pay millions more in fake payments to India through an agency agreement. The corrupt payments in Mozambique were made in connection with the sale of two commercial aircraft for approximately $65 million to Linhas Aéreas de Mo`ambique, S.A., the commercial state-operateer in Mozambique. During negotiations on the sale in 2008, a Mozambican national proposed that Embraer make a monetary “gesture” towards Mozambican officials when the first aircraft was delivered. Embraer offered to pay between $50,000 and $80,000, which was dismissed as an insult by the CEO of Linhas Aéreas de Moéambique. Embraer eventually accepted the CEO`s proposal to pay a payment of $800,000 ($400,000 per aircraft) and entered into a consulting agreement with a company linked to the Mozambican national for $800,000, although the company did not provide legitimate services to the embras. As part of the agreement with the U.S. government, Embraer will pay $107 million to the Department of Justice and pay more than $98 million in disgorgement and more than $98 million in interest to the Securities and Exchange Commission (SEC) as part of a three-year deferred criminal prosecution (DPA) agreement. As part of the data protection authority, Embraer acknowledged a conspiracy in violation of the FCPA`s anti-corruption provisions, the FCPA`s accounting and registration provisions, and the deliberate non-performance of appropriate internal accounting controls. As part of the privacy statement, Embraer agreed to implement numerous compliance measures for businesses, including maintaining an independent monitor for three years. In 2008, Embraer paid $800,000 under another falsified agency agreement to bribe a senior official of Mozambique`s state-run commercial company, Linhas Aéreas de Mo`ambique S.A. (LAM).

The carrier purchased two aircraft from Embraer for $65 million. Embraer S.A. (ERJ) (“Embraer” or “Enterprise”) informs its shareholders and the market that, based on the Company`s essential facts as of May 19, 2015, July 29, 2016, October 12, 2016 and October 24, 2016, Embraer and the U.S. Department of Justice (DOJ) agreed on the duration of external and independent oversight under the DEferred Prosecution Agreement with the DOJ (DPA) to extend ninety (90 days) “extended”) to allow the monitor to complete its audit. As a result of this extension, the data protection authority also extended its duration by an additional ninety (90) days. “Embraer paid millions of dollars in bribes to win pro-government aircraft contracts on three different continents,” said Assistant Attorney General Caldwell. “But these prosecutions show that the criminal department will hold accountable those who treat corruption as a mere business cost. Between the US, Brazilian and Saudi authorities, bribes and bribes were brought to justice for their misconduct. In 2008, Embraer paid US$3.5 million to a government official in the Dominican Republic through a falsified agency agreement.